The author is a Forbes contributor. The opinions expressed are those of the writer.

Loading ...

Loading ...

This story appears in the {{article.article.magazine.pretty_date}} issue of {{article.article.magazine.pubName}}. Subscribe

Data from ForeSee, a customer experience analytics firm, revealed that the NFLShop.com would increase sales by selling merchandise for women, such as this jersey.

The mass exodus of shoppers from J.C. Penney, prompted by the drastic store changes made by now-ousted CEO Ron Johnson, serves as a cautionary tale of what can happen when retailers don’t follow that old saying by fabled retailer Marshall Field, “give the lady what she wants.”

But that is, of course, easier said than done. What exactly does she want?

Retailers are paying closer attention to the tricky art and science of creating a compelling in-store experience that matches shoppers wants and needs, and it’s no wonder: Consumers are diverting more of their purchases online and increasingly showrooming -- browsing brick-and-mortar stores to check out potential purchases, only to buy them later from online merchants like Amazon at lower prices.

Differentiate or Become ‘Amazon Road Kill’

Indeed, “differentiate or die” was the overarching message from ColumbiaBusiness School’s Retail & Luxury Goods Conference, “Retailing Unplugged: Innovate, Collaborate, Recreate,” according to a research note this month from retail analyst Deborah Weinswig.

“Panelists at the conference remarked that brick-and-mortar retailers must create a differentiated experience, whether a unique product or innovative service, or risk becoming Amazon 'road kill,’” she said in the report.

In turn, retailers are shining a harsh spotlight on the in-store experience they deliver, what they need to change about that experience, and the return on investment of the changes they make.

“With consumers having so much choice and [easily] knowing what competitive prices are ... the challenges that retailers face to survive and thrive today are far greater than they’ve ever been,” Larry Freed, CEO of ForeSee, which bills itself as a leader in customer experience analytics with clients such as , Kohl’s and Target, told Forbes.

“So for retailers, competing based on price, location and even product is no longer sufficient. The way they’ll win is by providing a superior customer experience – which is proven to be an accurate predictor of financial performance.”

The company conducts customer satisfaction surveys for retailers, the results of which are fed into ForeSee’s statistical engine to forecast what changes to the in-store experience will fly (or flop) with shoppers before those tweaks are actually made, Freed said.

Predictive analytics stands in stark contrast to how retailers typically test changes to their business: by trial and error.

But trial and error is not only costly and time consuming, it’s also an unreliable way to evaluate the success or failure of an in-store change, Freed said.

“It’s often difficult to gauge which factors led to which result,” he said. “For example, you might observe that Customer A was greeted upon entering a store, and Customer B wasn’t, and Customer A subsequently spent more. But were there other differences that contributed to that outcome?”

ForeSee is also offering retailers a way to measure their businesses from an integrated, omni channel – stores, web and mobile – perspective, rather than in separate silos, which is not how consumers shop these days, he said.

“Consumers have changed a lot, [but] retailers have been slow to react to the multi channel consumer."

Here’s how ForeSee has worked with Hickory Farms, Perry Ellis and NFLShop.com to boost the retailers’ return-on-investment via predictive analytics.

Hickory Farms: Unearthing Untapped Sales

Hickory Farms sells food gifts in over 700 Hickory Farms stores, online and at other U.S. retailers.